Worst is over for Singapore offshore marine firms, says Goldman – Business News

SINGAPORE: Singapore’s offshore and marine industry may be on the brink of recovery, with Goldman Sachs Group Inc. expecting rig orders to pick up from 2020.

“We believe the worst is over for the offshore and marine sector, with green shoots visible as rig utilisation improves and pockets of demand emerge for new builds,” Goldman Sachs analyst Jason Yeo wrote in a note Monday, starting coverage of Keppel Corp. with a buy rating and Sembcorp Marine Ltd. and Sembcorp Industries Ltd. as neutral.

Sembcorp Marine’s Chief Executive Officer Wong Weng Sun is upbeat on the outlook, according to a Tuesday report in Singapore’s The Business Times. Orders under construction may help the company return to an operating profit next year, thenewspaper said, citing an interview with Sun.

“There is a chance next year that operating margins may turn positive,” Sun was cited as saying. The company hasn’t been profitable at the operating level since 2016, according to data compiled by Bloomberg.

A recovery in crude oil prices before the Organization of Petroleum Exporting Countries and allied producers Dec. 6 meeting in Vienna also bodes well for the industry’s outlook.

Oil held near $53 a barrel after climbing the most in more than five months Monday. Saudi Arabia and Russia extended a cooperation pact and U.S.-China trade tensions cooled. – Bloomberg